2. Let's compare the price and output decisions of a competitive rm versus a monopoly. Examine Diagram 1 below and answer the questions that follow. [40 points) Diagram 1 $Price 600 1600 Quantity per week In Diagram 1 above, suppose the industry is a competitive one. What would be the price charged and quantity exchanged? Explain how you derived your answer. (10pts) Now, assume Diagram 1 represents an industry that is a monopoly. What would be the prevailing price and quantity exchanged? Explain. (10pts) Assume Diagram 1 represents an industry that is a monopoly. What would be the profit per week? Show your calculations. (10pts) At what point (C, E, F, or G) on Diagram 1 does allocative efciency occur? Explain. (10pts)